Insured Contract Coverage under the BAP
May 21, 2012
Our insured has a BAP policy with symbol 1 for liability and symbol 8 for physical damage. An employee rented the vehicle at the direction of the insured for business. The policy does not include the Employee Hired Autos endorsement. Based on the insured contract language in the BAP, would the liability be primary for the rental vehicle that was rented by the employee at the request of the insured?
Arizona Subscriber
The other insurance clause states that the coverage is primary for any liability assumed under an insured contract. So you have to look at the definition of insured contract to see about the coverage. An insured contract includes that part of any contract pertaining to the rental by the named insured OR any of the named insured's employees of any auto. So, since the auto was rented by the employee, that fits the definition. The coverage for liability to a third party is primary, but note that the definition of insured contract states that such a contract is not an insured contract to the extent that it obligates the named insured or the employee to pay for PD to the rented auto.
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